Key elements of the report
The company released its quarterly report for '21. 21Q1 achieved revenue of 1,096 million yuan, +50.58% year on year; net profit of Fumo was 217 million yuan, +157.49% year on year; net profit after deducting non-return mother's net profit was 208 million yuan, +157% year on year. The main reason for the increase in revenue and profit was the company's sharp increase in sales of silicon wafers. The company's Q1 comprehensive gross margin reached 39.62%, +8.18pct year on year and +8.26pct month-on-month. The main reason for the increase in gross margin was the continuous decline in non-silicon costs in the company's silicon wafer business.
Investment highlights:
The profit level is good: In the first quarter of this year, the company's Wuhai phase I's 8GW production capacity climbed. The estimated Q1 silicon shipment volume was about 175-1.9 GW. Based on the price of silicon wafers including tax of 0.54 yuan/W, the company's silicon revenue should be 84-912 million yuan. The company's non-silicon costs continue to decline. With the price of silicon rising, it is expected that the Q1 silicon wafer gross margin will remain above 30%, and the corresponding net profit of the silicon sector is about 120 million yuan, which is in line with our previous expectations. As the production capacity of the company's Leshan Phase I and Wuhai Phase II is gradually released in the second half of the year, the annual silicon wafer profit is expected to reach 800 to 9 billion yuan.
The power plant business remained stable, and the sale of a 300MW wind farm maintained asset-light operation: the company's Q1 power plant segment remained relatively stable, achieving 294 million kWh of PV settled electricity and 81 million kWh of wind power. The grid-connected capacity of the photovoltaic power plant is 1.25 GW, and the wind power is 0.15 GW, a decrease of 300 MW from the previous one. This is mainly due to the company's plan to transfer 41% of the shares in the Xilinhot 300MW wind farm to Inner Mongolia Jidian Energy Co., Ltd. The company maintains an asset-light operating model, and the scale of the power plant is stable.
A large proportion of single crystal furnaces comes from production capacity in Leshan and Wuhai, and the high-end equipment business is expected to decline: the company began construction of Leshan Phase I 12GW and Wuhai Phase II 10GW production capacity one after another this year. The 1600mm monocrystalline furnace produced by the company will use a large proportion of its own production capacity expansion. Only a small portion is sold abroad. Revenue from the high-end equipment business is expected to decline to a certain extent this year. We believe that with the installation of Wuhai Phase II and Leshan Phase I monocrystalline furnaces one after another this year, the company's silicon wafer production capacity construction will slow down next year, demand for monocrystalline furnaces will decrease, and external supply will increase. It is expected that revenue from the high-end equipment business will gradually recover.
Profit forecast and investment advice: The company's revenue for 21-23 is estimated to be 91.29/183.25/21.103 billion yuan respectively, and the net profit of the mother is 10.74/2195/2,812 billion yuan respectively. The corresponding EPS is 0.44/0.91/1.16 yuan/share respectively. The company's silicon wafers are fully produced and sold out, and performance is released as scheduled. With the launch of new production capacity in the second half of the year, we expect the company to ship 13-14 GW of silicon chips throughout the year. Maintain the buying rating and maintain the target price of 14.06 yuan/share.
Risk factors: The speed at which new production capacity was put into operation fell short of expectations, the profitability of 210 silicon wafers fell short of expectations, and the price of upstream raw materials rose sharply; the price of silicon wafers fell short of expectations, and the risk of technological change.
